Finding 618094 (2022-002)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-03-26

AI Summary

  • Core Issue: Payroll hours for one employee were incorrectly entered in five pay periods, leading to potential misallocation of costs.
  • Impacted Requirements: Internal controls over payroll must ensure compliance with 2 CFR 200.303(a) and 2 CFR 200.430(i)(1) for accurate and allowable cost allocation.
  • Recommended Follow-Up: Strengthen internal controls by implementing a monthly review of payroll data entry for at least 10% of employees, focusing on those reporting to multiple programs.

Finding Text

2022-002 Activities Allowed or Unallowed, Allowable Costs/Cost Principles Medical Assistance Program ? CFDA No. 93.778 ? Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Hours from payroll timesheets were incorrectly entered into the payroll allocation spreadsheet for five pay periods for one sampled employee. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(1), Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated Cause: The Organization?s established internal controls over payroll cost allocation did not operate as intended. Effect: Payroll costs that are not allowable per the terms and conditions of the grant, or improper payroll costs could be charged to the grant. Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring payroll costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Adult Care Management, Inc. (ACMI) agrees with the finding of Taylor Roth & Company, PLLC, in the fiscal year 2022 Single Audit (SEFA) that the established internal controls over payroll cost allocation did not operate as intended to ensure appropriate allocation of payroll costs across all programs in the five (5) of the twenty-four sampled payroll periods for one (1) individual. Effective March 10, 2023, the internal control practices of ACMI will be strengthened to support a review system able to prevent and/or detect and correct errors in a timely manner to ensure payroll costs are accurate, allowable, and properly allocated. Specifically, management?s monthly review of all cost allocations will include a review of the data entry hours from payroll timesheets into the payroll allocation spreadsheet of no less than 10% of total reporting employees, with a priority focus on employees reporting time to more than one program / cost center.

Categories

Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 41651 2022-001
    Significant Deficiency
  • 41652 2022-002
    Significant Deficiency
  • 618093 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.778 Medical Assistance Program $1.05M